Nifty View: Update for 16th Jan 2019

Near Term Trend: ↔ (sideways with a positive bias)

Market update: Nifty opened on a strong note at 10800 and kept marching higher and finally closed at 10890 levels up 150+ points. Nifty saw good momentum on the upside after so many days and closed and added lot of points above the opening prices.

Till recently bulls were failing to add any points above the opening price levels however todays trading was different we saw good amount of buying and that too with good momentum. When we covered our shorts yesterday @10700 levels many were telling me that its not a right decision that too when market has given a breakout from the trading range (contraction). However I had been continuously mentioning in my posts that the first breakout would most likely be a false breakout just to lure in the unsuspecting traders.

 I also mentioned that yesterdays break out could be a 'bear trap'. That's the reason we exited and booked some 80-90 point profits in our short positions.Nifty gave a sharp upmove today and has proved that yesterdays breakout  below 10750 levels was just a 'bear trap'. We even added longs today @ 10822 then 10854 and just before closing @10885 levels. I also kept mentioning that one leg on the upside is pending and today (probably) Nifty has started that up leg already.

So what next? is the near term trend has changed to positive now? I would say probably yes but we need to see some more evidence before we conclude that. First hurdle is 10920 levels and after that a solid resistance at 10980 levels. We are not setting any profit target for now and will see when to exit basis how market behaves during upcoming trading sessions and will exit/book profits accordingly.

Overall please keep in mind that market still remains in a corrective mode and any upside can terminate anytime without giving any warning so pls be careful. All trades have to be properly managed keeping in mind many factors, so don't be reckless. Its not a market where you can blindly go long or short.

Trading Recommendations: We exited our shorts yesterday and booked profits @10700 levels and have gone long today. For now I don't recommend shorts ( one might get better shorting opportunities later on). If you are wondering why I have changed my stand from bearish to bullish positions then its because charts are telling me so. I will always do what charts are telling me and my motive is to be on the right side of market.

Imp thing:After Friday (18th jan), we will not be posting our trading details and trading recommendations ( entry exit points) here as we are turning paid and our trade recommendations will exclusively be reserved for our paid subscribers ( will continue to post my general market view though). In case you wish to join us pls follow below link ( subscription fee is kept as bare minimum as an introductory offer)

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Thanks & Happy Trading to you!


 

Nifty Trade Update -15th Jan 2019

Nifty Trade Update -15th Jan 2019

Update 10:05 AM:  Nifty CMP  10822 - Buy Nifty one part
Update 11:45 AM:  Nifty CMP  10854 - Buy Nifty one more part
Update 03:10 PM:  Nifty CMP  10885 - Buy Nifty 2 parts
 
Open Positions: 4 parts long
Nifty 2 parts @ avg 10838
Nifty 2 parts @ 10885


Update 18th Jan: These trades were closed @ 10880 ( all 4 parts)

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Nifty View: Update for 15th Jan 2019

Near Term Trend: ↔ (sideways)

Market update: Nifty opened with a slight gap down at 10750 levels and dropped sub 10700 levels intraday trading before closing at 10737 levels down 60 points.

10750 has been a formidable support for nifty and today Nifty broke it and even the contraction channel was broken on the downside still we have changed the near term trend to 'sideways' from 'down'. Lack of impulse or momentum in the current fall is raising question if its indeed the start of a fresh downmove or just a corrective move (which is extending time wise and price wise)

From trading perspective we decided to cover our remaining shorts around 10700 levels in the morning. There were many traders who went short today once the 10750 level was broken ( and market gave a breakout below the contraction range) thinking downmove has started. However for a downmove to begin there has to be an impulse which is clearly missing since last few days. Thats the reason we decided to exit. But it still doesn't mean that Nifty is turning bullish and should immediately go long. Market can still fall from here in next few days but the chances of same have reduced a bit for the time being.

So for now we need to watch Nifty movement closely for next few days and then see in which direction to trade. If we feel strength is returning to markets then we wont hesitate from taking a long position. As per our view, nifty should have seen the start of a downmove trend by now but since its still stuck in a range and that could mean one more leg on the upside is pending.

Technically speaking, we are still in a complex corrective and all we are saying is that probably Nifty will spend some more time in the correction zone before the actual downmove actually begins. So lets see how Nifty behaves in next 2-3 trading sessions we will accordingly see what needs to be done.

Trading Recommendation: We exited our balance short position @10700 levels and currently have no open positions. Like mentioned above we need to observe markets for few trading session to decide what needs to be done. 

Happy Trading to you!

Nifty Trade Update -14th Jan 2019

Update 12:26 PM:  Nifty CMP  10704 - Nifty cover balance short now. Position NIL

Open short Positions:
NIL

Nifty Weekly Charts: Inside bar pattern

Nifty View: Inside bar pattern on Weekly chart

In the morning I tweeted about Nifty making a "inside bar" pattern on weekly charts. Inside bar patterns occurs when Market trades between the high and lows of previous trading session. Here we are discussing weekly charts ( one candle for one week) hence 'inside bar' means for entire week Nifty failed to take out the highs and lows of previous week. This again point us in the direction which says markets are contracting and usually all contractions are followed up by expansion which might begin with an violent action.

Now why this pattern assumes significance is because this is something which is not very common, in 2018 it happened just 2 times and you can see both times it followed by a trend movement in Nifty.  Another point worth noticing is that last week candle was actually a Doji candle  (Doji signifies indecisiveness where open and close rates are almost same). So there are more than 1 or 2 factors which are saying that markets are ready to move from here now. 

Nifty Weekly chart

Markets can not remain in a range, off course they can spend some time in a narrow range but sooner or later they have to break. It happens because traders and investor get bored of seeing same prices day in day out. I do not want to predict the direction of the breakout however regular reader of my blog are aware that I have been bearish on Markets for quite some time so I wont be surprised if the breakout happens on the downside. I am bearish because charts and prices are telling me so but if charts changes tomorrow so will my views. As a trader, we have to be prepared for all scenarios ( including bullish ones) and while today charts are pointing down it can change anytime.

Just one word of caution, this contraction of range has become too obvious and most traders are now aware of it so don't be in any hurry to trade the breakout even if that means losing 40-50 even 100 points. I don't think it will be easy to trade going forward even though you  knows that break out is going to happen. Reason I say so is that  Initial break out may be (I say may be) a false breakout so first let market show that its actually broken out and trend has begun. No one can time the markets and no one can buy at bottom and sell at top so don't even think about doing so.

Nifty View: Update for 14th Jan 2019

Near Term Trend:  ↓ (Down)

Market update: Nifty opened at par and as the trend has been recently, failed to add any points above the opening price but at the same time support came when Nifty turned lower and touched 10740 levels. Market finally closed at 10795 levels down 25 points.

Bulls are supporting market whenever market turns lower and 10740-10750 area has turned out to be a formidable support for Nifty. Please note its in line with our view that market is in 'contraction' mode and support area is moving up and up ( 10340 /10530/10630 now 10740).  Similarly the resistance area is also coming down. Bulls are supporting Nifty at every drop but at the same time failing to take Nifty higher above the opening prices.

Overall it was again a lackluster day of trading where Nifty didn't make any kind of move and volatility was missing. This calmness in the market is probably just the silence before the actual storm comes. One should keep light position and trade with a strict stop loss. Divergence continues between Bank Nifty and Nifty and key oscillators still suggesting that Nifty remains in a down trend. Nifty made a lower low today and made a closing below yesterdays low which is definitely a weak sign. However markets have a tendency to bounce back after 2 bear candles (today was the 2nd bear candle on intraday chart). So we need to observe markets for signs of strength in the next 1-2 trading session.

Technically speaking- diametric is still in formation, prices remain in contraction mode and trading range is getting shorter and shorter everyday. Going forward it will not be easy to trade as there is every likelihood that this contraction will first see a 'false breakout' first to suck in the traders. So pls don't get carried away after seeing a sudden spike out of this range, observe the markets and then only take a trading call.

Trading Recommendation: We exited our one part short today @10810 levels (initiated at 10840)now just carrying one part. Still don't suggest going long at this stage. For now one  should carefully observe the markets and then only take a trading call. Like I said volatility can increase anytime trapping you on wrong side so pls be very careful. If you must trade then trade with a strict stop loss.

Have Nice weekend!